A Glimpse Into the Future:
Predicting the Health Care Landscape
In 2009
February 26, 2009
San Diego, CA
Copyright © 2008 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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What to Expect Today
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Obama Initiatives - “New Face of Change”
Congressional Initiatives - “What’s In the Pipeline?”
Health IT - “A Brave New World”
Federal Oversight - “No Pain, No Gain”
 FDA
 Pharma guidance
 Transparency of drug/device manufacturers
State Oversight - “Will the Feds Follow the Leader?”
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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President Barack Obama
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"Our health care is too costly; our schools fail too
many; and each day brings further evidence that the
ways we use energy strengthen our adversaries and
threaten our planet."
"We will restore science to its rightful place, and
wield technology's wonders to raise health care's
quality and lower its cost."
- January 20, 2009 - Presidential Inaugural Speech
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Test Your Knowledge!

Today, there are 38 million seniors in the United
States; by 2030, that number will rise to:
a) 25 million
b) 39 million
c) 75 million
d) 100 million
Correct answer is (c)
Source: ASCP Fact Sheet
(http://www.ascp.com/about/ascpfactsheet.cfm)
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Test Your Knowledge!

Of the following demographic groups, which is
more apt to NOT have health insurance?
a) Women over the age of 65
b) Children under the age of 18
c) Males between the ages of 18 and 24
d) Men and women between the ages of 50 and 65
Correct answer is (c)
Source: Graziadio Business Report (Pepperdine University), 2004,
Volume 7, Number 3
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Test Your Knowledge!

According to the U.S. Census Bureau, in 2007, __
persons of all ages were uninsured.
a) 0 million
b) 24 million
c) 10 million
d) 45.7 million
Correct answer is (d)
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy
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What We Know Now
Future Implications
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - What We Know Now
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Invest $10 billion a year over the next five years in
electronic health information technology systems.
 This will translate into $77 billion of savings each year
for the health care system because of increased
efficiency.
Improve access to preventive services and disease
management programs.
 Maintain disease management programs.
 Coordinate and integrate care.
 Require transparency regarding quality and costs.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - What We Know Now
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Lower costs by eliminating anti-competitive actions in the
insurance and drug industries.
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Prevent unjustified price increases and force insurers to pay out a
reasonable share of their premiums for patient care instead of multimillion dollar bonuses to CEOs.
Prevent private insurance waste and abuse in Medicare by eliminating
excessive subsidies to Medicare Advantage (MA) plans.
• According to CMS, the government currently pays 12% more to MA plans
than it costs to treat comparable beneficiaries through traditional Medicare.
• With the recent announcement of only a 0.5% proposed increase for 2010,
questions arise about the program’s growth prospect - insurers may cut
benefits or increase premiums to maintain their profit margins, which could
lead beneficiaries leaving the Medicare Advantage plans for governmentrun programs.
• Eliminating this overpayment would save the government $54 billion over
five years.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - What We Know Now
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Lower costs by eliminating anti-competitive actions
in the insurance and drug industries, cont.
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Allow consumers to import safe drugs from other countries.
• Two bills introduced on January 6, 2009:
• H.R. 163: provides for an application process for would-be importers,
and would expressly permit certain drug sales via the Internet.
• S. 80, the Pharmaceutical Market Access Act of 2009: sets forth a
detailed registration process for exporters, imposes inspection and
education requirements on the FDA, and includes provisions regarding
patent infringement, pricing discrimination, and penalties related
thereto.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - What We Know Now
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Lower costs by eliminating anti-competitive actions
in the insurance and drug industries, cont.
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Prevent brand name drug companies from blocking generic
drugs from consumers through compensation agreements with
generic drug companies.
• Senator Herb Kohl re-introduced a bill on February 3, 2009: the
Preserve Access to Affordable Generics Act.
• This bill is similar to legislation previously introduced by Sen. Kohl but
would also permit the FTC to exempt from the ban an agreement that
would benefit consumers.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - What We Know Now
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Lower costs by eliminating anti-competitive actions
in the insurance and drug industries, cont.
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Allow the Secretary of Health and Human Services (HHS) to
negotiate for cheaper drug prices by repealing the 2003
Medicare Prescription Drug Improvement and Modernization Act
(MMA) ban that prohibits the government from interfering in the
negotiation of prescription drug prices and discounts for
Medicare.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - What We Know Now
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Affordable and accessible coverage for all
Americans.
 Require insurance companies to cover preexisting
conditions.
 Create a National Health Insurance Exchange to help
individuals find and purchase health insurance.
• Serve as a “watch dog” on insurance plans
• Create rules and standards for participating insurance plans
• Implement the National Health Plan
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - What We Know Now
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Institute a government-run insurance plan (the
National Health Plan) modeled after the Federal
Employee Health Benefits Program (FEHBP).
• Available to all uninsured, underinsured, and small
employers that do not offer their own plan to employees.
• Provide a comprehensive benefits package covering all
essential medical services including preventive, maternity,
and mental health care.
• Affordable premiums, co-pays and deductibles.
• Simplify paperwork for providers which will increase savings
to the entire health care system.
• Easy enrollment and ready access to coverage.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - What We Know Now
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National Health Plan, cont.
• Participants may change jobs without changing their health
insurance coverage.
• Require participating hospitals and providers to collect and
report quality and efficiency data.
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Tax credits to purchase insurance.
• Provide small businesses with a refundable tax credit of up
to 50% on premiums paid to purchase health insurance for
employees.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - What We Know Now
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“Play or Pay” Requirement
• Require large employers that do not offer adequate health
insurance benefits to employees to contribute a percentage
of payroll toward the costs of the National Health Insurance
Exchange.
• Small businesses are exempt from this requirement.
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Require health care coverage for all children.
Expand eligibility for Medicaid and State Children's
Health Insurance Program (SCHIP).
Allow states to continue to experiment with health
care reform.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - Future Implications
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Reduce the number of uninsured by 18 million at a cost
of $86 billion in the first year.
Cover 34 million of the nation’s projected 67 million
uninsured at a cost of $1.6 trillion over 10 years.
Close to 100% of children will be insured.
The “play or pay” requirement may expand employersponsored insurance, but it depends on the extent that
large employers choose to “play” rather than “pay.”
Source: The Commonwealth Fund, The 2008 Presidential Candidates’ Health Reform
Proposals: Choices for America (October 2008)
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - Future Implications
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The plan has the potential to:
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Provide everyone with comprehensive and affordable health
insurance.
• However, in the absence of a requirement that everyone have
health insurance, the proposal will likely fall short of achieving
universal coverage.
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Achieve greater equity in access to care by offering everyone
affordable health insurance that covers preexisting conditions.
Achieve efficiencies and cost savings by reducing administrative
burdens on health care providers and insurers.
Source: The Commonwealth Fund, Envisioning the Future: The 2008 Candidates’ Health
Reform Proposals (January 2008)
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - Future Implications
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With Tom Daschle withdrawing his nomination as the
Secretary of Health and Human Services (HHS), the immediate
opportunity for healthcare reform may be at a standstill
 Current frontrunner for the nomination is Kathy Sebelius
(Governor of Kansas).
 Daschle’s coauthor of the book entitled “Critical: What We Can
Do About the Health Care Crisis”, Jeanne Lambrew, has started
as the White House Office of Health Reform’s deputy director.
 Important concepts in the book:
• Move forward quickly on health care reform but in a step-bystep approach.
• Not get “bogged down” in the details as happened with the
Clinton health care reform plan.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - Future Implications
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Daschle Recommendations for Moving Forward
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Encourage Congress to create a National Health Board:
• To oversee and set policy for all health care (including Medicare,
Medicaid, and private insurance) in the United States, much like
the Federal Reserve Board manages banks.
• That has the independence to make difficult and “politically
dangerous” decisions.
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Create an insurance purchasing pool similar to the Federal
Employees’ Health Benefits Program so individuals and small
businesses can purchase health insurance plans with a defined
set of benefits from competing insurers.
Reform that builds on the existing health care system of
employer-based insurance as well as Medicare and Medicaid.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Obama Health Policy - Future Implications
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“I have a feeling that if you look at what’s happened
with prescription drugs, with children’s health
insurance, with bipartisan support, that the notion of
making health care less of a public responsibility
doesn’t feel like the direction that our country is
likely to go in.”
- Lawrence Summers, newly-appointed White House
Lead Economic Advisor and former U.S. Treasury
Secretary
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Congressional Initiatives
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2009 Stimulus Package
SCHIP
Health Care Reform Proposals
CBO Reports
Medicare and Medicaid Initiatives
• As the cost of health care continues to rise at the same time
as quality and effectiveness decreases, health care reform
has returned to the national stage.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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2009 Stimulus Package
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On February 17, 2009, President Obama signed into law a $787
billion economic stimulus package that includes:
• $87 billion to boost federal contributions to states for Medicaid and the
State Children's Health Insurance Program.
• $25 billion to help pay premiums for workers who have lost their jobs and
want to keep their employer-sponsored health insurance.
• $19 billion to promote adoption of health information technology.
• $2 billion “start-up” funding to promote adoption of health information
technology.
• $17 billion for Medicaid and Medicare incentives to providers for
adopting certified electronic health records.
• Establishes a timeframe for the use electronic health records by each
person in the U.S. by 2014.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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2009 Stimulus Package cont.
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On February 17, 2009, President Obama signed into law a $787
billion economic stimulus package that includes:
• $10 billion to increase medical research funding through NIH and to
renovate research facilities.
• $1.1 billion for comparative effectiveness research to compare
drugs, medical devices, and other treatments to determine which
are the most effective.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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2009 Stimulus Package cont.
 Health Information Technology for Economic
and Clinical Health Act (“HITECH Act”)
•
Health IT provisions of the Stimulus Package
• Establishes a collaborative process led by the Office of the
National Coordinator for Health Information Technology
(ONCHIT) in developing standards by 2010 that allow for
secure nationwide electronic exchange of health information.
• Establishes the HIT Policy and Standards Committees to
recommend standards, implementation specifications, and
certification criteria for electronic exchange and use of health
information.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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2009 Stimulus Package cont.
 HITECH Act cont.
•
Health IT provisions of the Stimulus Package
• Improves and expands upon current federal privacy and
security protections for health information such as requiring
that an individual be notified if there is an unauthorized
disclosure or use of their health information and requiring a
patient’s permission to use their personal health information
for marketing purposes.
• Establishes Regional Extension Centers, which would provide
technical assistance and disseminate best practices to
support and accelerate efforts to adopt, implement, and
effectively utilize health information technology.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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2009 Stimulus Package cont.
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Other appropriations for health information technology
•
National Telecommunications and Information Administration
•
•
•
$4.7 billion for the "Broadband Technology Opportunities Program"
to remain available until expended
At least $4.35 billion spent on grants for expanding public computer
center capacity (community colleges and public libraries); grants for
innovative programs to encourage sustainable adoption of
broadband service; for audits and oversight of the funds provided;
and to develop a broadband inventory map.
Indian Health Service
•
$85 million for the Indian Health Services for health information
technology activities such as telehealth services development and
related infrastructure requirements.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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2009 Stimulus Package cont.
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Other appropriations for health information technology cont.
• Health Resources and Services Administration
• $2.5 billion for grants to health centers; grants for construction,
renovation and equipment, and for the acquisition of health information
technology systems, for health centers; to address health professions
workforce shortages; and for the National Health Service Corps to
provide scholarships, loan repayment, and grants to training programs
for equipment, and grants.
• Rural Utilities Service
• $2.5 billion for the cost of grants, broadband loans, and loan
guarantees and for grants for broadband infrastructure in any area of
the United States.
• At least 75% of the area to be served must be in a rural area without
sufficient access to high speed broadband service to facilitate rural
economic development, as determined by the Secretary of Agriculture.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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2009 Stimulus Package cont.
 Appropriations for Science and Technology
• National Institutes of Health (NIH)
• $1.3 billion for the National Center for Research Resources for
grants to construct, renovate, or repair existing non-Federal
research facilities and to provide shared instrumentation and
other capital research equipment to recipients of grants.
• NIH Office of the Director
• $8.2 billion to support scientific research, including entering into
transactions (other than contracts, cooperative agreements, or
grants) to carry out research.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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2009 Stimulus Package cont.
 Appropriations for Science and Technology
• Agency for Healthcare Research and Quality
• $700 million for comparative effectiveness research, including
acceleration in the development and dissemination of research
assessing the comparative effectiveness of health care
treatments and strategies.
• National Institute of Standards and Technology
• $580 million for scientific and technical research and
construction of research facilities.
• National Science Foundation
• $2.5 billion for research and related activities.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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State Children’s Health Insurance Program
 On January 14, 2009, the House voted 289-139 to
extend SCHIP for four-and-a-half years following a
one-hour debate.
 The bill would expand coverage to more than 11
million children at a projected cost of $31.5 billion.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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Proposals For Health Care Reform
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Wyden (D-OR)-Bennett (R-UT) Bill - The Healthy Americans Act
(HAA) -- Bipartisan legislation introduced in January 2007 likely to reemerge in 2009
• Seeks to provide universal coverage by creating a new
private insurance system involving state-based purchasing
pools
• All Americans will be required to enroll in the private insurance plan
• Employer-based coverage reduced over time
• Medicaid and SCHIP converted into supplemental insurance programs
• Referred to Senate Finance Committee with no further
action.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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Proposals For Health Care Reform
 Senate Finance Chair, Max Baucus (D-MT) - “Call to
Action” White Paper (11/12/08)
• Call to Action has three important “legs”:
• 1) A policy that ensures meaningful coverage and care to all
Americans;
• 2) An insistence on higher quality and greater value, which
would result in less costly care;
• 3) A commitment to weed out waste, eliminate overpayments,
and a financing structure that works for taxpayers as well as
health care recipients and providers.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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Proposals For Health Care Reform
 Senate Finance Chair, Max Baucus - “Call to Action”
White Paper (11/12/08) cont.
• The Baucus Plan would, among other things:
• Ensure that every individual can access affordable coverage by
creating nationwide insurance pool called the Health Insurance
Exchange.
• Provide for a Medicare buy-in and expanded SCHIP coverage.
• Strengthen the role of primary care and chronic management.
• Refocus and realign payment incentives towards quality and value.
• Improve infrastructure by investing in research and health IT.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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Proposals For Health Care Reform
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On November 17, 2008, Senator Ted Kennedy (D-MA) said he
plans to advance a bill in early 2009 that would call for universal
health care, however, has also indicated he would defer to the
Obama Administration.
Joins Baucus and Wyden as leading participants in the effort to
establish universal health care.
Kennedy, however, has a head start - Despite his illness, he
directed his staff in mid-2008 to begin work on legislation that
would vastly expand health coverage, a career-long goal of his.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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Proposals For Health Care Reform
 Senator Kennedy has set up four subcommittees under the
Health, Education, Labor, and Pensions (HELP) Committee to
hold hearings on different aspects of health reform.
• A way to brainstorm and bring in new ideas to a public forum.
• Allows the committee to work in Kennedy’s absence.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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Proposals For Health Care Reform
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Henry Waxman (D-CA), Chairman of the House Committee on
Oversight and Government Reform defeats John Dingell (D-MI),
longest serving member of the House, for Chair of the House
Energy and Commerce Committee.
Dingell taking on role as “Chairman Emeritus”
May indicate:
• A potential shift in Committee focus.
• A potential restructuring of subcommittees.

Has requested information from CMS Acting Administrator,
Kerry Weems regarding Medicare Part D plan pricing.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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As Congress debates the best way to implement
health care reform, the Congressional Budget Office
(CBO) is actively seeking answers to control the
cost of health care.
 Expanded the number of staff analyzing health care
issues from 30 in 2007 to 50 in 2008.
 Established a panel of health advisers from
academia, industry, and independent research
organizations to analyze health policy research and
advise the CBO.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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In December 2008, the CBO released two reports:

“Key Issues in Analyzing Major Health Insurance Proposals”
• Projects that federal spending on Medicare and Medicaid will rise from
about 4 percent of gross domestic product (GDP) in 2009 to nearly 6
percent in 2019 and 12 percent by 2050.
• Estimates that the average number of nonelderly people who are uninsured
will rise from at least 45 million in 2009 to about 54 million in 2019.
• By themselves, premium subsidies or mandates to obtain health insurance
would not achieve universal coverage. Proposals could, however, achieve
near-universal coverage using a combination of approaches.
• Other approaches—such as the wider adoption of health information
technology or greater use of preventive medical care—could improve
people’s health but would probably generate either modest reductions in the
overall costs of health care or increases in such spending within a 10-year
budgetary window.
- Robert A. Sunshine, CBO, Acting Director
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill
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Medicare and Medicaid Initiatives
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On September 11, 2008, a hearing was held before the House
Ways and Means Subcommittee on Health regarding reform of
the Medicare physician payment system.
• Without changes to the current system, physicians face a
20% payment reduction by 2010.
• Recommendations
• Congress should ask the Medicare Payment Advisory
Commission (MedPAC) and the Government Accountability
Office (GAO) to consider the development of alternative coding
systems for physician services.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill

Medicare and Medicaid Initiatives
• Recommendations, cont.
• Repeal the current fee-for-service system and adopt a
bundled payment system for physicians starting in 2010.
• Adopt a capitated payment system to encourage
providers to work within a budget and to invest in
systems and infrastructures that reduce costs and
improve efficiencies.
• Congress is still considering the different options.
• Promote prevention and detection, not procedures
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

While the President, Congress, federal agencies and
states grapple with the best way to reform and
regulate health care, the world is moving forward
into a technologically advanced age and dragging
the health care industry with it.

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
New technological advances creating more cost-effective mechanisms
for prescribing, monitoring and tracking prescription drugs and
utilization.
Keeping up with and meeting new regulatory requirements, as well as
the challenges created by the new technology.
The billions of dollars in grants and payments for health information
technology that is available in the Stimulus Bill should encourage the
industry to step up to the plate and adopt and implement health
information technology.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

The Health Care Industry’s Reluctant Adoption of
Information Technology
 Health care providers have been quick to adopt
breakthrough technology in medical procedures, but
slow to accept innovations in networking and
communications.
• Concern about breaches in security and patient privacy
• Health care services traditionally performed locally and in
person
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

According to the science and technology experts,
as reported by the Wall Street Journal, future
technological advances may allow outsourcing and
offshoring of medical services.



Systems integrations will allow medical records to be transferred
swiftly and securely all over the world.
Creation of a global database to monitor the safety of
prescription drugs from every part of the world.
Professionals and patients will find authoritative up-to-date
information on every specialty on the Internet.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

These technological advances will not happen
overnight. There are many obstacles which need to
be addressed.
• Likely differences in laws and regulations across borders
may necessitate the need for international laws governing
medical services.
• Possible differences in technical standards between different
countries could create conflicts and call for global standards.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

E-Prescribing

Section 132 of MIPPA added to the e-prescribing provisions of the MMA.
It authorizes a new incentive program to encourage e-prescribing by
establishing physician bonus payments for e-prescribing and penalties for
failing to e-prescribe.

Prescribers qualify for the incentive if:
• They report applicable electronic prescribing measures established
under the Physician Quality Reporting Initiative (PQRI); OR
• They electronically submit prescriptions under Medicare Part D at a
level determined by CMS

The incentive payment program began on January 1, 2009.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

E-Prescribing, cont.

CMS held a conference on October 6-7, 2008, to encourage
adoption of e-prescribing technology as a way to improve the
health care system.
• Physicians have electronic access to each patient’s
prescription history which helps them to:
• Avoid prescribing drugs that may result in harmful drug
interactions.
• Prescribe drugs that are covered and affordable resulting in
fewer patient trips to the pharmacy.
• Eliminates the possibility of medication errors caused by
illegible handwriting.
• Reduces confusion and miscommunication.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

State Initiatives
 Electronic Monitoring and Internet Prescribing
• In 2008, fifteen states (CA, GA, HI, KS, IL, MA, MN, NH, NY,
OH, PA, SC, TN, VT, WA) proposed or enacted laws on eprescribing
• Develop and regulate the electronic transmission of
prescription drug orders.
• Establish Internet prescribing practices to provide increased
protection for consumers who purchase prescription drugs
over the Internet.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

Personal Health Records
 An electronic record of health-related information on
an individual that conforms to nationally recognized
standards and that can be drawn from multiple
sources while being managed, shared and controlled
by the individual.
 As people move from state to state, they leave a trail
of fragmented or partial medical records behind.
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Health IT - A Brave New World

Personal Health Records cont.


Currently, in a world of decentralized record keeping where
records are maintained by multiple entities and in multiple
locations – makes the system duplicative and sometimes
creates conflicting information.
New world would be filled with personal health information
networks (PHINs), regional health information organizations
(RHIOs), or national health information exchanges (HIEs) – a
very centralized system.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

Electronic Health/Medical Records
 Not the same as PHRs
 Controlled by physicians or hospitals
 Benefits of EHRs
• Reduce medical errors
• Improve efficiency of care
• Incentive payments for meaningful use of certified EHR
technology
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Health IT - A Brave New World

Fraud and Abuse Safe Harbor
 In August 2006, CMS and OIG published final rules
with an exception to the physician self-referral
prohibition and a safe harbor under the anti-kickback
statute, for arrangements involving donation of
interoperable EHR technology to physicians and
other health care practitioners or entities from
businesses with whom they work.
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Health IT - A Brave New World

Fraud and Abuse Safe Harbor
 The exception and safe harbor establish the
conditions under which:
• Entities furnishing designated health services (and certain
other entities under the safe harbor) may donate to
physicians (and certain other recipients under the safe
harbor) interoperable electronic health records software,
information technology and training services.
• Hospitals and certain other entities may provide physicians
(and certain other recipients under the safe harbor) with
hardware, software, or information technology and training
services necessary and used solely for electronic
prescribing.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal Agency Initiatives



In the last 2 years, Congress, with the Democrats in
power, has introduced new laws governing
reimbursement policies for healthcare providers.
These laws, as well as various enforcement
initiatives, have spawned new federal regulations
and guidelines promulgated to implement them.
In addition, the contaminated heparin scare
(January 2008) has initiated a renewed interest in
monitoring prescription drugs.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal Agency Initiatives

Food and Drug Administration (FDA) Commissioner




Who will it be?
FDA is responsible for, among other things, ensuring human
and veterinary drugs, biological products, and medical devices
are safe and effective.
Recently, Representative Dingell has identified health care
reform and FDA legislation as top priorities for Congress.
Recently, Dr. Sidney Wolfe, head of the health research group
at Public Citizen, was appointed to a four-year term on the
FDA’s Drug Safety and Risk Management Committee, which
advises the FDA on drug safety issues.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal Agency Initiatives

Food and Drug Administration (FDA) -- In light of the
recent reports of contaminated drugs coming from
outside of the U.S., as well as initiatives to reduce
drug costs, Congress has a renewed interest in drug
pedigree laws.

Prescription Drug Pedigree Laws
• Provide participants in the drug distribution system with a history of
the drug’s source to prevent adulterated products from reaching
consumers.
• Federal Prescription Drug Marketing Act of 1988
• Required the FDA to promulgate implementing regulations for
the pedigree provisions.
• FDA has delayed implementation and indicated that it will not
initiate enforcement actions for failing to provide a pedigree.
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Federal Agency Initiatives

Food and Drug Administration (FDA)
 Prescription Drug Pedigree Laws
• Compliance issues
• The lack of clear federal criteria for prescription drug pedigrees
has created the opportunity for states to pass their own
pedigree laws.
• As of 2007, 10 states (AZ, CA, FL, HI, IN, NJ, NM, NV, OK, VA)
have enacted pedigree laws regulating drug importation or reimportation.
• MA, NY, TN proposed similar legislation in 2008.
• Drug distributors find it difficult to comply with the myriad of
state laws.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal Agency Initiatives

Food and Drug Administration (FDA)
 Prescription Drug Pedigree Laws, cont.
• Introduction of bipartisan pedigree legislation in the House
by Steve Buyer (R-IN) and Jim Matheson (D-UT) in April
2008 - no similar bill in 2009 yet
• Serialization for “at-risk” drugs at a time determined by the
FDA
• Pedigree traced back to the original distributor
• Preemption of conflicting state pedigree laws
• Bonding requirements
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Happenings on Capitol Hill

Proposals For Health Care Reform

Representative Frank Pallone, current Chair of the House
Energy and Commerce Committee’s Subcommittee on Health
cont.
• Importation
• Address the public crisis in which the FDA does not have
resources or authorities it needs to properly ensure safety of
goods being imported from abroad.
• Better equip public health agencies to handle growing
mandates to ensure safety of Americans.
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Federal Agency Initiatives

Food and Drug Administration (FDA)


On January 12, FDA issued guidance on reprint practices,
making it easier for drug and medical device manufacturers to
disseminate information on unapproved uses of their products
using medical journal articles.
The guidance described certain conditions where drug or device
manufacturers could provide information about unapproved
uses for approved products.
• FDA regulations prohibit manufacturers of new drugs and devices
from advertising their products to doctors for any use that FDA has
not determined to be "safe and effective."
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Federal Agency Initiatives

Food and Drug Administration (FDA)
 Recently, the FDA announced a two-year pilot
program aimed at improving drug safety.
 “The Secure Supply Chain” program seeks to enlist
100 drugmakers that would help demonstrate the
feasibility of a system for guaranteeing the safety of
foreign-produced drugs and active ingredients.
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Federal Agency Initiatives

Food and Drug Administration (FDA)
 In November 2008, the FDA, under fire for not having
resources to protect consumers at home, deployed
staff abroad to work directly with importers and
foreign regulatory agencies
 On November 19, 2008, the FDA opened its first
overseas office in China.
• Eight employees in three offices (Beijing, Shanghai, and
Guangzhou) to certify inspections of U.S.-bound Chinese
exports.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal Agency Initiatives

Food and Drug Administration (FDA)


In November 2008, the House Energy and Commerce
Committee launched an investigation after receiving a letter
from 9 FDA scientists within the agency’s device division about
device approval methods and other issues at the FDA’s Office
of Device Evaluation.
Recently, the same group of nine scientists sent a letter to the
Obama transition team and Tom Daschle, calling the FDA
"fundamentally broken" and expressing the need for agency
reforms.
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Federal Agency Initiatives

Food and Drug Administration (FDA)
 Recent developments
• As a result of the investigation into the allegations of the scientists, recently
obtained internal documents by the Times show that in 2007, 41 medical
devices underwent the most rigorous approval process, compared with
3,052 other devices that only received abbreviated reviews.
• According to the Times, an internal memo noted that FDA managers
pushed agency reviewers to use the abbreviated process on complex or
novel medical devices that likely should have been reviewed more
extensively.

What this may mean
• Increased regulatory action.
• Longer approval process for many medical devices.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal Agency Initiatives

Food and Drug Administration (FDA)
 Recent developments
• On January 15, GAO released report recommending that the
agency fulfill the promises it made 14 years ago to fix its
system for approving complex medical devices.
• The report recommended that the FDA issue regulations either
reclassifying devices into a lower class, or keeping the device in class
III. The regulations should then require that all class III devices go
through the more stringent PMA process for approval and marketing.
• The FDA has acknowledged the importance of promulgating such
regulations, but have not agreed to provide a time frame for doing so.
• The report, mandated by Congress in legislation passed in
2007 to reform the FDA, comes in the midst of the nearrebellion by the 9 scientists within the agency’s device
division.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal Agency Initiatives

Food and Drug Administration (FDA)
 Follow-On Biologics (“Biosimiliars”)
• Need for abbreviated regulatory pathway
• In June 2008, CBO estimated that between 2009-2018, an abbreviated
pathway could reduce expenditures on biologics by $25 billion.
• Major sticking points remain:
• Safety/comparability: Biologics are complex medicines manufactured using
living organisms, but many assert that current technology allows for
comparison of follow-on biologics to previously approved (reference)
biologic drug product.
• Patent/Data exclusivity protection: Need to balance innovation with
competition.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal Agency Initiatives

Food and Drug Administration (FDA)
 Follow-On Biologics (“Biosimiliars”)
• Generic supporters have rallied behind a bill from Rep.
Waxman that grants no exclusivity period, though recent
indications by the Congressman that he is willing to offer
some period for patent protections suggest that a
compromise may be reached.
• A bill from Senators Kennedy and Enzi that provides 12
years of data exclusivity will likely re-emerge as the leading
vehicle to establish a pathway for follow-on biologics.
• First favorable markup of a biogenerics bill out of committee in
2008 tees up the issue for 2009.
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Federal Agency Initiatives

Food and Drug Administration (FDA)
 Follow-On Biologics (“Biosimiliars”)
• European Union (EU) Model
• EU passed legislation and implemented guidelines for an
abbreviated approval pathway for follow-on biologics.
• Level of review is determined on a case-by-case basis with
some classes requiring more intense review than others.
• Typically, 10 years of market exclusivity.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal Agency Initiatives

Federal Trade Commission (FTC)
 Pay for Delay
• FTC filed suit in federal court to block a manufacturer of a brandname drug from paying competitors to delay selling the cheaper
generic versions.
• Under these "pay-for-delay" deals, both parties benefit because the
generic companies are paid to do nothing and brand name
drugmakers make more money for longer periods of time by having
the only drug of that type in commerce.
• In early February, Sens. Kohl and Grassley reintroduced legislation
that would prohibit such deals. House Energy and Commerce Chair
Waxman will likely reintroduce the House version of the legislation
soon.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Other Pharma Insight

PhRMA Voluntary Guidance Document Amendments

Includes input from and given deference by federal agencies such as
CMS and the OIG.
• Imposes new restrictions on meals
• Prohibits entertainment and recreation to any healthcare professional who is not
an employee of the company.
• Prohibits financial support for continuing medical education (CME) that could be
considered an inducement to prescribe a particular medicine.
• New disclosure requirement
• Contains new guidelines regarding the use of prescriber data.
• Establishes an annual certification process to promote compliance with the
PhRMA Code.

Became effective January 1, 2009.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Other Pharma Insight

AdvaMed Code of Ethics (Code) - Effective July 1,
2009 - Generally:




AdvaMed will publish on its website a list of all companies that
have submitted an annual certification that they have adopted
the Code.
Companies can enter into royalty arrangements in exchange for
contributions that improve medical technologies.
Companies cannot provide or pay for any activity or recreation
for any health care professional who is not an employee of the
Company.
Meals must be incidental to the bona fide presentation of
scientific, educational, or business information and should not
be part of an entertainment or recreational event.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Other Pharma Insight

AdvaMed Code of Ethics (Code) - Effective July 1,
2009 cont.




Other than medical textbooks or anatomical models used for
educational purposes, items that benefit patients or serve a
genuine educational function should have a fair market value of
less than $100.
Certain activities involving the provision of coverage,
reimbursement and health economic information are permissible.
Provide research and educational grants and charitable donations,
unless for an unlawful inducement.
Pursuant to guidelines, provide products for education on newer
and improved technologies.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Other Federal Agency Initiatives


Office of the Inspector General (OIG)
 Work Plan 2009 - Identifies priority areas for OIG
review/investigation.
Centers for Medicare & Medicaid Services
 New Marketing Standards
 Broker Compensation and Oversight
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal and State Oversight Initiatives

Pharmaceutical Industry

Physician Payment Sunshine Act of 2009
• “To shine light” on payments by drug, device and biologic makers
to health care providers.
• In January 2009, Senators Grassley and Kohl introduced a new
version with “sharper teeth”
• Requires manufacturers and group purchasing organizations to
disclose all payments or transfers of value worth $100 or more.
• Requires disclosure of physician investments in and ownership of
manufacturers (knowing failure to do so can result in fines of up to
$1M/company).
• Beginning April 2011, required to report payments/transfers of value
for consulting fees, compensation for other services, honoraria, gifts,
entertainment, food, travel, education, research, charitable donations;
royalty/license fees, ownership of investment interests, CME speaker
fees/grants, and anything else HHS requires.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal and State Oversight Initiatives

Pharmaceutical Industry

Physician Payment Sunshine Act of 2009 cont.
• Several states have enacted laws similar to the 2007 version of
the bill. However, the 2009 version, if enacted, would NOT
preempt state laws that mandate more reporting requirements.
• The pharmaceutical industry (e.g., PhRMA and AdvaMed) has
generally come out in support of the legislation, but has
advocated for a higher threshold reporting requirement.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal and State Oversight Initiatives

State Oversight Initiatives

In August 2008, Massachusetts passed a sweeping law targeted at
pharmaceutical and medical device manufacturing companies.
• Requires pharmaceutical and medical device companies to adopt the
voluntary PhRMA guidelines.
• Prohibits companies from paying for a physician’s meal unless the meal is
part of an informational presentation made by the company, and is
consumed within the physician’s office or a hospital setting.
• Prohibits companies from giving a physician any item of recreational or
entertainment value, or paying for travel, lodging, or other personal
expenses for a physician to attend a CME event.
• Mandatory disclosure requirement for all pharmaceutical or medical device
manufacturers that confer any economic benefits on a health care provider.
• Imposes a fine of not more than $5,000 for violations of the law.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Federal and State Oversight Initiatives

State Oversight Initiatives

In 2008, nine states (CA, HI, IL, NE, NH, NJ, NY,
WA, WI) proposed legislation similar to the
Massachusetts law. The District of Columbia passed
such legislation in 2008.
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Possible Trends in State Initiatives

Privacy and "Data Mining"


Thirteen states (AZ, CA, DC, HI, IL, KS, MD, MA, MO, NC, RI,
SC, WA) proposed legislation to restrict or prohibit the sale or
redistribution of prescription sales record information that
identified patients or prescribers.
NH, ME, and VT already passed such legislation in 2007.
• NH law contains prohibition on the sale or transfer of
prescriber-identifiable prescription data that may be used for
commercial purposes.
• Although the NH law was recently upheld, the court limited
the scope of the law to in-state transactions, therefore, if
data is transferred out of NH for a permissible purpose, then
the sale of such data from the other state is not a violation.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Possible Trends in State Initiatives

Generic Carve-Outs


Another growing trend in state legislatures in the past few years
involves a new version of the old argument that generic drugs
are not the same as brand name drugs.
Generic carve-outs prohibit pharmacists from substituting
generic drugs for certain classes of prescription drugs (e.g.,
anti-epileptics, immunosuppressants, and mental health drugs)
without notification to both the physician and the patient, even
when the physician has not indicated any problems with generic
substitution.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Possible Trends in State Initiatives

Generic Carve-Outs - Growing trend in state
legislatures in 2007-2008
 Twenty-four states proposed legislation to prohibit
generic substitution of anti-epileptic drugs without
physician consent.
 Twenty-nine states proposed such legislation for
immunosuppressant drugs.
 4 states (HI, IL, TN, UT) have already passed this
type of legislation for anti-epileptic drugs.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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Possible Trends in State Initiatives

Generic Carve-Outs
 Necessity or Not?
• FDA allows for a 20% variation in effectiveness between
brand name drugs and generics, thus carve-out legislation
may be needed to protect patients most sensitive to small
changes.
• On the other hand, the Pharmacy Care Management
Association (PCMA) made the following findings:
• Carve-out legislation runs counter to the opinion of the FDA
• Increased cost for everyone without increased quality of care.
NOTE: There is no proposed federal generic carve-out legislation
at this time.
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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So Where Are We At?





Several key legislative and regulatory proposals
would create more “transparency” throughout the
health care industry
With the new President, we should expect that
health reform is on the horizon
Federal and state oversight becoming more evident
through enforcement initiatives
Efficacy matters
Technological advancements leading to more
efficient health care delivery
Copyright © 2009 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C .
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